Lycos Inc. has announced that it will form an incubator unit called LycosLabs that will help fund between six to twelve firms, with another dozen or more in the second year.

LycosLabs plans to invest in New England-based firms that focus on next-generation wireless; providing application services for small firms; “viral” e-commerce; and e-commerce infrastructure.

According to Jeff Crown, Lycos vice president and general manager, the company has over $1 billion in cash and marketable securities to play with.

JOEL'S OPINION
It looks like Lycos wants to get in on the incubator action. I'm surprised that B2B wasn't on the list of potential investment areas, though. Not to mention that it's also not planning on funding any kind of content companies. Oh, well.

I wonder how much of that $1 billion will be allocated to the new unit? One would assume that Lycos is going to have to set aside a certain amount for its LycosLabs unit and not just dip into the Lycos CASH COW whenever it needs some investment dough.

I hope this doesn't start a chain reaction among portals. Right now, Yahoo! is investing in a number of businesses but has yet to rollout a separate investment unit. I'm sure it will start some sort of “copy cat” scenario, though. All of the portals like to offer the same thing that their competitors are offering. Actually, one of the only things that they're not copying right now is Lycos's foray into MP3. It seems that Lycos is the only one dedicating an area to downloading MP3s right now. Could that be next?